General Motors Puts $2.32 Billion of Stock Toward Funding U.S. Pensions
General Motors Co. contributed 60.6 million shares, valued at $2.32 billion at yesterday’s closing price, to U.S. pension plans that the automaker wants fully funded as soon as 2013.
The 40.4 million shares contributed to the plan for hourly workers and 20.2 million shares for salaried pensions completes a $6 billion contribution that the company announced in October, the Detroit-based automaker said today in a statement.
GM’s pension obligations could be funded as soon as 2013, Chief Financial Officer Chris Liddell said in a Jan. 11 interview at the Detroit auto show. Reducing debt and pension obligations will help the largest U.S. automaker to maintain spending on vehicle development through downturns, Bloomberg reported.
“You can’t have this huge tail wagging the small dog,” Liddell said. “You can’t be a $100 billionpension plan with a car company attached to it. The value of the company should be driven by the quality of the vehicles and the margins we make on them, not what the discount rate is.”
The U.S. plans were underfunded by $17.1 billion at the end of 2009. Calculations of pension liabilities are sensitive to assumptions about interest rates used to calculate the present value of projected future expenditures.
Liddell said it is “reasonable to think we’re in an interest rate-increasing environment over the next three to five years,” which would help GM to fund its pension. He said GM “is not relying on that.”
The “first call” on GM’s cash is engineering and marketing, he said, while repaying debt and making pension plan contributions are secondary.
GM has gained 16 percent since the automaker’s $33 initial public offering in November. The shares fell 35 cents yesterday to $38.27.
More Industry

Penske Auto Group Deal a Record
The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.
Read More →
War Toll a Damper on Used Auto Prices
Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.
Read More →
Bridge the Maintenance Gap
With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.
Read More →
California Store Has New Owner
The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.
Read More →
BMW Plant Pursues Cleaner Energy
BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.
Read More →
Auto Affordability Inches Up
The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.
Read More →
Ohio Auto Group Under New Ownership
After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.
Read More →
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →